Quick assets refer to cash and other assets that can be readily converted into cash within a short time frame. This includes items such as accounts receivable and marketable securities, which are classified as current assets. However, it does not encompass inventory, as inventory may take longer to sell and convert into cash.
In legal practice, quick assets play a significant role in various contexts, particularly in financial and business law. They are often relevant in:
Users can manage some of these processes with legal templates available through US Legal Forms, which are drafted by qualified attorneys.
Here are a couple of examples of abatement:
Example 1: A company has $50,000 in accounts receivable due within 30 days and $20,000 in marketable securities. These would be considered quick assets totaling $70,000.
Example 2: A business owner applies for a loan and includes their quick assets in the financial statement to demonstrate liquidity. (hypothetical example)
| Term | Definition | Key Differences |
|---|---|---|
| Current Assets | Assets expected to be converted to cash within one year. | Includes quick assets plus inventory. |
| Liquid Assets | Assets that can be quickly converted to cash without significant loss. | Liquid assets may include quick assets but also cash itself. |
If you are assessing your financial situation or preparing for a loan, it's important to accurately calculate your quick assets. Consider using US Legal Forms to find templates that can help you prepare financial statements or reports. If your situation is complex, consulting with a financial advisor or attorney may be beneficial.
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| Attribute | Details |
|---|---|
| Typical components | Accounts receivable, marketable securities |
| Exclusions | Inventory, long-term assets |
| Usage | Financial assessments, loan applications |